Daily Market Recap – BTCUSD surges to record highs, prompted by introduction of new ETFs

BTC hit a new all-time high the day after the first U.S. ETF based on bitcoin futures went public, a development that is expected to spur investment in the digital asset.

Cryptocurrency ETFs have been launched this year in Canada and Europe amid growing interest in digital assets. One of the main reasons for its resurgence in recent weeks is the bet that U.S. regulators allowing the first bitcoin futures ETF would pave the way for more investment from retail and institutional investors.

With inflation rising in many major economies, investors are increasingly betting that major central banks will raise rates as a result. Against this backdrop, some market participants say bitcoin's purported inflation-proof qualities have also fuelled recent gains.

The bullish phase that began in the bitcoin price during the September 30 trading session was prompted by the breach above the major technical support at $40,000. This threshold was the chartist border between the bullish and bearish medium-term scenarios, with the former taking the upper hand in a clear-cut manner.

The BTC futures market forged the rise over the past 3 weeks as a new all-time record for Open Interest on BTC futures contracts (i.e. the number of contracts currently being created) were reached.

BTC was spurred on by the validation of the BTC ETF of the issuer ProShares by the SEC, the US stock exchange regulator. This physical ETF is based on Bitcoin futures contracts, so it is easy to understand the positive decision of the SEC, which is always very close to the CFTC, the all-powerful US futures regulatory agency.

This third wave of gains since the summer rebound to $30,000 has taken the price above the all-time high of $65,000 set last spring. Fibonacci projections associated with Elliott waves are a technical way to project theoretical price targets. A first resistant zone is between $70K and $72K, which is the very next price target as long as the market preserves the $60K support.

 (Chart Source: Tradingview 21.10.2021)

After a corrective and profit-taking month of September, the new bullish impulse that started on September 30 revealed very different characteristics from the summer one. It was centered on the price of bitcoin, with a very clear rebound in its dominance, preceded by technical bullish divergences over the medium-term time horizon from the 40% weight threshold in total capitalization. These divergences produced their bullish effect this October, with a return towards 48%/50%, the neckline of a potential double-dip configuration.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.